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STRAMA PAPER - GROUP 4

Philippine Long Distance Telephone Company (PLDT)

Acknowledgement

We would like to express our sincere gratitude to each and every one of us in Group 4, for the hard work and cooperation in completing this paper.

To our Professor, Mr. Sofronio “Toti” Dulay, for giving us the opportunity to experience this kind of activity that can help us enhance our skills and ability, for sharing his knowledge about strategic management, and for guiding us all throughout the semester.

To our families, for always motivating us and supporting us when we feel stressed and pressured. To our chosen company, PLDT Inc. and to all the author of the websites that we used, for giving us the information that we need in order for us to finish this paper.

Most of all, to our Almighty God, for guiding us and giving us strength. This paper would not be possible without the help of the people who were gratuitously sharing their time for us and who were always there for us.

1 Executive Summary

This strategic management paper shrouded the first largest and only integrated telecommunication company, The Philippine Long Distance Telephone, Inc. (PLDT) within the Philippines. PLDT, Inc. has been awarded Ph's first global MEF 3.0 certification for carrier ethernet services. The company is the leader in providing a wide extend of media transmission services, counting settled line, cellular, and broadband services in the country.

This paper provides PLDT’s corporate vision and mission. The vision statement is brief and comprehensive, it identifies the company’s goals and defines where and what PLDT Inc. wants to be in the future. The mission statement is realistic and clear, PLDT Inc. has recognized its target client bunches, and also distinguished their needs and requests, audibly it focuses on tending to issues of client fulfillment. It also implicated the corporate officers of the company. Provide some examples of the product and services they offered. In external assessment, the sector includes different kinds of forces, key external factors, and the Porter’s Model Analysis. It also evaluates the internal and external matrices that show the strong internal status and how successful PLDT Inc. in its field. After calculating the total weighted score of the matrices, they were translated into a formulation of business strategies.

The biggest competitor of the company in the telecommunication sector is Globe Telecom. In the fixed-line telephone market, PLDT with its subsidiary is Globe’s main rival. PLDT was consistently increasing in revenues against Globe Telecoms. In general market development in terms of subscriber’s base within the year is still at 7.3% and the market value is still at 8.1% making the company drop into quick advertise development. Based on the increment of subscriptions and the overpowering volume of information usage tied down with the rising modern technologies.

2 Internal Assessment

2.1. Corporate Profile

PLDT

Headquarters:

Ramon Cojuangco Building, Makati Avenue corner Dela Rosa Street, Legazpi Village, Makati, Philippines.

PLDT is the Philippines' largest and only integrated telco company. Founded on November 28, 1928, the Philippine Long Distance Telephone Company (PLDT) is the leading telecommunications and internet service provider in the Philippines. Through its three principal business groups—fixed line, wireless and information and communication technology, PLDT offers the largest and most diverse range of telecommunications services across the Philippines’ most extensive fiber optic backbone and fixed line, cellular and satellite networks.

The company's core businesses are fixed-line telecommunications, mobile telephony services, broadband, and internet of things services under various brands. It also has investments in broadcasting, print media, utilities, and direct to home satellite services, among others. As of 2019, PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and its American Depositary Shares are listed on the New York Stock Exchange (NYSE:PHI). PLDT has one of the largest market capitalizations among Philippine-listed companies.

The first president of PLDT was Theodore Vail Halsey while Major J.E. Hamilton Stevenot, who represented the American firm General Telephone and Electronics Corp. (GTE), was elected executive vice president and general manager.

When PLDT was incorporated and given the franchise to establish and operate telephone services in the country on November 28, 1928, a typhoon had just ravaged Eastern Visayas, Bicol Peninsula, and Samar. The ability to communicate amongst loved ones and across the country became crucial. Sadly, phone networks then were like disconnected intercom systems and you could only call people within your own small city. Filipinos were disconnected from neighboring towns, disconnected from friends in the other island and, needless to say, disconnected from the rest of the world. It was under this scenario that the law was signed giving birth to PLDT.

What the new law hoped to achieve was to interconnect these "intercom" systems into a seamless nationwide network that would facilitate communication and delivery of services to the people, as well as spur economic development in the countryside.

Under the American owners of PLDT, many small phone companies in the provinces were acquired by the Company to help speed up the rollout and connection of these different phone systems all over the country. The management of PLDT was then set to lay the groundwork towards linking Filipinos to each other and, more importantly, to the world.

2.2. Company Vision and Mission

VISION

“Lead and inspire Filipinos to create a better tomorrow.”

MISSION

“Empower Filipinos everywhere with customer-focused digital innovations that unlock and share their infinite potential.”

2.3. Corporate Officers

Table 1

The table above is showing the positions of every officers in PLDT Corporation. We also provided a list of the name and positional official officers of the company that we choose.

Manuel V. Pangilinan

President and Chief Executive Officer

Anabelle L. Chua

Senior Vice President, Chief Financial Officer and Chief Risk Management Officer

Alfredo S. Panlilio

Chief Revenue Officer

Victorico P. Vargas

Business Transformation Office Head

Ma. Lourdes C. Rausa-Chan

Corporate Secretary and Chief Governance Officer

Marilyn A. Victorio-Aquino

Senior Vice President and Chief Legal Counsel

Gina Marina P. Ordoñez

Senior Vice President and Chief People Officer

Alejandro O. Caeg

Senior Vice President

Mary Rose L. Dela Paz

Senior Vice President

Juan Victor I. Hernandez

Senior Vice President

Menardo G. Jimenez Jr.

Senior Vice President

Mario G. Tamayo

Senior Vice President

Florentino D. Mabasa, Jr.

Assistant Corporate Secretary

Leo I. Posadas

First Vice President and Treasurer

Katrina L. Abelarde

First Vice President

Marco Alejandro T. Borlongan

First Vice President

Mary Julie C. Carceller

First Vice President

Bernard H. Castro

First Vice President

Joan A. De Venecia-Fabul

First Vice President

Gil Samson D. Garcia

First Vice President

Joseph Ian G. Gendrano

First Vice President

Victor Emmanuel S. Genuino II1

First Vice President

Ma Criselda B. Guhit

First Vice President

Leah Camilla R. Besa-Jimenez

First Vice President

Princesita P. Katigbak

First Vice President

Albert Mitchell L. Locsin

First Vice President

Dale M. Ramos

First Vice President

Angel T. Redoble

First Vice President

Aileen D. Regio

First Vice President

Luis S. Reñon

First Vice President

Bernadette C. Salinas

First Vice President

Victor Y. Tria

First Vice President

Jude Michael H. Turcuato

First Vice President

Melissa V. Vergel De Dios

First Vice President

Catherine Y. Yang

First Vice President

John Henri C. Yanez

First Vice President

Maria Cecilia H. Abad

Vice President

Minerva M. Agas

Vice President

Benedict Patrick V. Alcoseba

Vice President

Cecille M. Alzona

Vice President

Elizabeth S. Andojar

Vice President

Roy Victor E. Añonuevo

Vice President

Tito Rodolfo B. Aquino, Jr.

Vice President

Mitchie M. Arcaina

Vice President

2.4. Product Line

The PDLT (Philippine Long Distance Telephone Company) provided an internet service in the country of the Philippines. PLDT has many bundles that they offer to people who wanted to have an internet connection. We gathered some image that shows the bundles and promos they offer. These we presented below is from their official Facebook page.

Figure 1. Pldt, Inc. Fiber Enterprises

2.5. Internal Factor Evaluation Matrix

Table 2

Note:

*Weight- 0-1 (important)

*Rating 1 (Major Weakness), Rating 2 (Minor Weakness), Rating 3(Minor Strength), Rating 4(major strength)

*Weighted score- Weight x Rate = Average score

The total weighted score of 2.68 in the table above indicates that PLDT has a strong internal status, with its strengths outnumbering its weaknesses.

Strengths

PLDT’s three main business groups, Fixed Line, Wireless, and Information and Communication Technology, provide the country’s most comprehensive and diverse range of telecommunications services. To offer the best services to their customers, the company uses the most comprehensive fiber optic backbone as well as fixed line, cellular, and satellite networks.

Weaknesses

On the other hand, one of PLDT’s flaws is its sluggish link speed. When PLDT introduced its Vibe and DSL products, which enabled customers to connect to the internet faster via broadband, there were numerous complaints about the service. The slow internet was the one of the top complaints as it failed to meet the customer’s needs. And those issues were not addressed or published in a timely manner. Customers may decide to switch providers if they believe that they find a better offer for the service they need.

3 External Assessment

a. Economic Forces

i) Economic/Business Cycle Stage

High political stability provides a stable and friendly business environment with predictable market growth trends. However, when there is political chaos, it deters the investors and harms the stakeholders’ trust in economic and consequent organizational performance. Currently, PLDT Inc. is present in different countries, each having own political tensions.

ii) Inflation/Employment/Interest/Exchange Rates

The GDP growth rate will determine the PLDT Inc.’s ability to pursue its long-term growth strategies. High GDP also signals the consumers’ ability to spend more on offered products. High unemployment signals the availability of surplus labor at comparatively lower wages. Operating in such a market can lower the production cost of PLDT Inc. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. The high interest rate will encourage the attitude towards investment and increase growth opportunities for PLDT Inc. Finally, the exchange rate fluctuation can also influence the profitability and international trade. The high fluctuation on local currency can be a cause of serious concern for PLDT Inc.

iii) Labor Market Conditions

PLDT Inc. must study and predict the labor market conditions to understand how it can attract talented workers and leverage their skills to improve business performance. When labor markets are flexible, PLDT Inc. can take advantage of higher labor productivity. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. PLDT Inc. should also carefully analyze the availability of skilled human capital as a shortage of skilled labor can affect business efficiency and make talent attraction and retention more challenging.

iv) Financial Markets Efficiency

The global expansion strategies of the PLDT Inc. are influenced by the financial market efficiency as operating in highly efficient financial markets leads towards improved liquidity position and strengthened ability to enter new markets. The health and efficiency of financial markets will determine PLDT Inc.’s ability to raise the capital at fair prices.

v) Economic Structure

The business practices of the PLDT Inc. are influenced by the prevailing economic structure. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition.

b. Social, Cultural, Demographic, and Natural Environment Forces

i) Demographic Trends

Studying the demographic characteristics can help PLDT Inc. in choosing the right market segment/segments with high growth potential. The business and marketing strategies are also influenced by migration. It is important for PLDT Inc. to understand the people’s general attitude towards migration as it can influence firms’ ability to bring international managers to host country.

ii) Equality and Power Distance

PLDT Inc. must adjust its business management practices while entering in markets with high or low power distance. The growing inequality in many countries is altering the power structure, which has serious implications for international business organizations like PLDT Inc.

iii) Gender Roles

PLDT Inc. need to study the traditionally assigned gender roles to align its marketing and communication practices accordingly. Marketing and human resource strategies in a traditional, patriarchal society with clearly distinguished gender roles will be different from societies with low gender stereotypes.

iv) Societal Norms and Class Distribution

PLDT Inc. should develop local teams and develop local partnerships for understanding the societal attitudes and norms to tailor marketing strategies according to unique cultural context. The observation of social class stratification is also important for PLDT Inc. Offering luxury products at premium prices to a market where the high-end market is considerably small in number will require PLDT Inc. to adopt the niche marketing strategies.

v) Online Shopping

PLDT Inc. needs to understand the online shopping behavior by considering the generational differences as younger consumers are more inclined to shop online than older customers. The growing use of mobile phones and social networking sites must be considered when developing marketing and communication strategies.

vi) Spending Patterns and Behavior

PLDT Inc. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. PLDT Inc. should also attempt to understand the degree of consumer ethnocentrism and consider the country of origin effect to determine local consumers’ evaluation of foreign products. Lastly, PLDT Inc. should study the consumers’ leisure interests and should focus more on enhancing the customer experience if customers prefer experiential products over traditional product offerings.

c. Political, Governmental, and Legal Forces

i) Political Stability

PLDT Inc. is present in different countries, each having own political tensions. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to PLDT Inc.

ii) Changing Policies

It is important for PLDT Inc. to study the current trends in the country’s political scenario as changes in government may alter the government’s priorities towards the development of different industries.

iii) Protests/Pressure Groups and Governance System

PLDT Inc. should carefully analyze the protests by pressure groups, social/environment activists and worker unions as such protests play an important role in the policy making process. Close collaboration with such groups may enhance the PLDT Inc.’s ability to collaborate with community and achieve long-term corporate goals.

iv) Bureaucracy and Corruption

Operating in countries with high corruption level and weak law enforcement makes the business environment increasingly unpredictable for PLDT Inc. due to jeopardized public trust on business organizations and overall political and economic structure. The corruption can influence various business operations, ranging from licensing, contracting, fraudulent deals to frequent lawsuits. It will also threaten the organization’s sustainable development by destabilizing the society, harming justice system and endangering the rule of law.

v) Taxation, Trade Restrictions, and Intellectual Property Protection

High taxation affects international trade and prevents exports. PLDT Inc. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. PLDT Inc. should know the specific taxation policies to understand the host government’s priorities and interest in developing industries and how intellectual property rights are protected in the host country and make the business strategies accordingly.

a. Technological Forces

i) Social Media Marketing

Use of social media has become common in a modern business environment. PLDT Inc. can leverage the opportunities offered by social media marketing to improve business performance. Technological trends can be used to start the creative social media campaigns for developing online brand communities.

ii) Technological Innovations and Development Level

PLDT Inc. should carefully consider the on-going technological innovations to stay ahead of the competition. Entering in markets where technological advancement has not reached the maturity means PLDT Inc. can increase the market share by focusing on emerging technological innovations.

iii) Research and Development on Technology and Impact on Cost Structure/Value Chain

PLDT Inc. needs to consider the investments made by competitors on a micro and macro level to understand how new technologies influence the firm’s value chain and prevailing cost structure. Research and development activities are highly important in an environment characterized by creative disruption.

iv) Shortened Product Life Cycles

The adoption of new technologies has shortened the lifecycle of new product development. Today, new products are developed quickly, and supply chain partners have also gained more power. It pressurizes PLDT Inc. to develop new products quickly, increase product range diversity, integrate flexibility into the value chain and develop healthy business relationships with value chain partners.

3.1. Porter’s Model Analysis

Figure 2. Porter’s Model Analysis

• Rivalry Among Competing Firms = Strong

There are only few competitors that PLDT have in the Philippines such as Globe Telecom, Sky Cable Corporation, and Converge ICT Solutions. Globe Telecom is one of the leading telecommunications companies in the Philippines. It operates mobile, fixed line, and broadband networks and provides communications services to individual customers, small and medium-sized businesses, and corporate and enterprise clients. Next is Sky Cable Corporation which is known as the first internet service provider and the leading cable and broadband technology provider in the Philippines. It offers broadband, cable and satellite television services. And lastly, Converge ICT Solutions which is the leading player in all-optical broadband access industry in the Philippines. It operates fixed networks, fiber optics, cable TV, enterprise private lines, fixed broadband, and wireless broadband services for home, businesses and in the corporate world. These are the top competitors of PLDT for having almost the same services in the market. In that case, PLDT should step up their game since they offer almost the same services with these competitors. They should try differentiating their services or add something unique by providing new services. In that way, PLDT can get new customers and gain more loyal customers.

• Potential Entry of New Competitors = Moderate

There are also new entries of competitors of PLDT such as Dito Telecommunity Corporation. Dito Telecommunity Corporation is formerly known as Mindanao Islamic Telephone Company, Inc., or Mislatel. It is considered as the newest major telecommunications company in the Philippines. It offers connectivity with secure, fast, and high value 4G and 5G technologies that enable the customers to be connected, anytime, anywhere, any way they prefer. PLDT should focus on innovating their services from this new competitor. In that way, it can build a strong brand identity in the market.

• Bargaining Power of Suppliers = Strong

These suppliers can influence in raising the prices as well as reducing the goods and services of PLDT. It includes foreign investors, international and local contractors, and stakeholders. Foreign investors such as American Depositary Receipts (ADRs) where they issued with American Depositary Share (ADS) which represented one PLDT common share. This means that ADSs are listed and traded on the New York Stock Exchange and the Pacific Exchange in the US where PLDT (as one of the largest market capitalizations) is in listed companies. International and local contractors such as Chinese telecom suppliers Huawei Technologies, FiberHome, Sunsea Telecom Ltd., and Tyco Electronics, Singapore-based Fujikura Asia Ltd., Sweden’s Ericsson Telecommunications, and Fibercom Telecom Philippines which helps in the first phase of its P1.8-billion fixed-line fiber-to-the-home (FTTH) network rollout program. And lastly, stakeholders which have a say in nominating directors as well as independent directors. Having these suppliers can help PLDT develop a close relationship where all of them can benefit from each other.

• Bargaining Power of Consumers = Strong

These consumers help in determining the quality of the goods and services offered by PLDT. It includes businessmen who are in charge in generating revenue from business activities, changing network services who are in charge of satisfying the customers' expectations and concerns regarding quality of service, pricing, application process, service provisioning process, repair and restoration service and the billing process, government sectors wherein having a partnerships with them can help the society, and lastly, small entrepreneurs such as PLDT Load / Smart Load from over 1 Million retailers nationwide and sari-sari stores or any PLDT Sales and Service Centers. These consumers can reduce the prices and improve the quality of the goods and services offered by PLDT.

• Potential Development of Substitute Products = Strong

These substitute products offer the same benefits of PLDT but in a different way. It includes mobile data and portable or pocket WIFI. Mobile data is an ability to use your cellular data in online browsing. It can also replace your internet at home especially if you are a light data user by activating your hotspot. Light data users use internet at home just to check the email, shop occasionally, or browse the websites. This can also save you from paying too much for an internet. Another substitute is Portable or pocket WIFI. Portable or pocket WIFI is a small wireless modem that connects any Wi-Fi enabled device (smartphones, laptops, and tablets) to the internet using load. It is small and light which makes it very comfortable to carry. These substitute products are considered as a threat for PLDT.

3.2. External Factor Evaluation Matrix

Table 3

Note:

*Weight ranges from 0.0 (Low Interest) to 1.0 (High Interest)

*Rating ranges from 1 to 4, 1 (Poor Rating), 2 (Average), 3 (Above Average), 4 (Superior Rating)

The External Factor Evaluation (EFE) Matrix shows the evaluation of external factors according to its weight, rating, and weighted score. The Key External Factors are based on the opportunities and threats of PLDT. Based on the gathered data, the total weighted score of weight is 1.0, while the weighted score is 3. This means that PLDT’s strategies are effective in taking advantage of the opportunities and preventing threats in the company.

3.3. Competitive Profile Matrix

Table 4

Note:

*Weight ranges from 0.0 (Low Interest) to 1.0 (High Interest)

*Rating ranges from 1 to 4, 1 (Poor Rating), 2 (Average), 3 (Above Average), 4 (Superior Rating)

The three companies had met the average standard of how performance of the industry should be in terms of what kind of service that this company is giving to their customers. As you can see from the table in terms of the scoring and with the comparison of various strengths and weakness that has been computed and being scored, we can tell that in terms of the final result, the PLDT has more advantage on attaining and being successful at their field because of how they cater the demands of their customers which is their strong point. It is mostly in terms of the PLDT’s breath of service offered and its availability and accessibility to the whole various people and to their customers which makes them attain and preserve the excellency they are known of in their line work as it is. The reason why the other major strengths of the other two companies of its competition had been seemed as not sufficient or effective is because of the availability and quality of the products that is being produced is mostly not covered by most demand of the customers all across the country.

3.4. Key External Factor

Political Forces

Since PLDT is a major telecommunications firms the exert a specified services to masses as its own advantages and disadvantages that could lead as its weakness in the long run. Such major companies such as PLDT must have or initiate a long term plan on how they will organize and solve such incoming or futuristic issues that will provided on them in terms on their connection in the political environment

According to Fern Fort University, this are some political factors that could affect the company and some investors or shareholders must be wary before they enter this type of huge company by determining PLDT’s:

· Political stability and importance of Telecom Services – Foreign sector in the country’s economy.

· Risk of military invasion

· Level of corruption – especially levels of regulation in Technology sector.

· Bureaucracy and interference in Telecom Services – Foreign industry by government.

· Legal framework for contract enforcement

· Intellectual property protection

· Trade regulations & tariffs related to Technology

· Favored trading partners

· Anti-trust laws related to Telecom Services – Foreign

· Pricing regulations – Are there any pricing regulatory mechanism for Technology

· Taxation – tax rates and incentives

· Wage legislation – minimum wage and overtime

· Work week regulations in Telecom Services – Foreign

· Mandatory employee benefits

· Industrial safety regulations in the Technology sector.

· Product labeling and other requirements in Telecom Services – Foreign

Economic Factors

PLDT is one of the huge companies in the Philippines where they hold a certain amount of power to keep the market going and to satisfy the needs of their customers through internet communications and digital services through their servers. And such economic factors of the Philippines could work in their favor in terms of growth rate of the industry, inflation & industry’s economic indicators as digital service provider will be determined on how they’re daily goals of assets and profits will be in the next several years. PESTEL analysis is also a great way to examine and to enlist such several major factors that could identify future advantages and disadvantage of a major company when dealing itself in the macro perspective of its environment. In terms of the economic factors, according to the Fern Fort University of Ferndale State of Michigan, such economic factors that could impact the economic environment of PLDT are:

· Type of economic system in countries of operation – what type of economic system there is and how stable it is.

· Government intervention in the free market and related Technology

· Exchange rates & stability of host country currency.

· Efficiency of financial markets – Does PLDT Inc. needs to raise capital in local market?

· Infrastructure quality in Telecom Services – Foreign industry

· Comparative advantages of host country and Technology sector in the particular country.

· Skill level of workforce in Telecom Services – Foreign industry.

· Education level in the economy

· Labor costs and productivity in the economy

· Business cycle stage (e.g. prosperity, recession, recovery)

· Economic growth rate

· Discretionary income

· Unemployment rate

· Inflation rate

· Interest rates

Social Factors

As major company that scope a wider variety of its audience and customers has its advantage and disadvantage that could compare to the various strength and weaknesses of the company which could depend from the social community’s way of life and its cultural outlook towards on doing things which could involve such particular company where in this case the PLDT is serving its customers as a digital and technological services which is a need to be catered to the needs of its customers as such daily activities are mostly involve in this company. PLDT should always need to understand the well-being and the needs of their clients as their generated profit and income surrounds from its users. Social customer leadership is a potent factor to lead and to know what factors that could impact the social status of the company in the eyes of its wider audience, According to the (Fern Fort University, n.d.), using such PESTEL analysis could determine the:

● Demographics and skill level of the population

● Class structure, hierarchy and power structure in the society.

● Education level as well as education standard in the PLDT Inc. ’s industry

● Culture (gender roles, social conventions etc.)

● Entrepreneurial spirit and broader nature of the society. Some societies encourage entrepreneurship while some don’t.

● Attitudes (health, environmental consciousness, etc.)

● Leisure interests

Technological Factors

In this time of digital age we need to remember in all the things that surrounds us may not seem as they used to be. It is far more competitive and we grab the innovative approach towards success and improving our ways of life This could set as an example of the technological services and devices that is being distributed into this globalized economy. We should always remember that every industry has its impacts to any other types of other industry or services that comes along the way and if we disrupt this process we may face such difficulties in coping up or slowing down to give opportunities to the key players of any specific industry into this globalized age. In the last recent years technological services has been improving and it is fast approaching and sometimes there are such instances that it is hard to cope with and with the best possible social is to determine whether on how we keep on track on the playing field which will not only make a greater impact to the company or in the PLDT company in this case but also to the competitive companies on it who struggle to make a difference and to improve the ways how economy is distributed in the globalization. According to the (Fern Fort University, n.d.), such technological factors that could impact and shall be determined and to determine its outlook in the future is in terms of the:

● Recent technological developments by PLDT Inc. competitors

● Technology’s impact on product offering

● Impact on cost structure in Telecom Services – Foreign industry

● Impact on value chain structure in Technology sector

● Rate of technological diffusion

Environmental Factors

Being technological service provider we must look into the various effects of the environmental situations that we deal every day because it should always remember that technology can have a various effects from which condition of the weather occurs in our day to day environment as it is the most vulnerable type of industry that is very much exposed and that could also depend on the environmental factors where it could impact the PLDT conditions of its services to the users as it is. And it is very crucial as every day we are losing money and generating profits on it from time to time. Using the PESTEL analysis, PLDT could determine its adverse impact to their operations in terms of:

● Weather

● Climate change

● Laws regulating environment pollution

● Air and water pollution regulations in Telecom Services – Foreign industry

● Recycling

● Waste management in Technology sector

● Attitudes toward “green” or ecological products

● Endangered species

● Attitudes toward and support for renewable energy

Legal Factors

Having a well establish legal framework is very important for the major business in the macro environment to thrive as this will be the bases on how they’re going to protect their organizations and the well-being of their company without its legal documents being a possible impact whether it could be a positive or a negative effects to its company. I case of the PLDT, they should always remember to determine and to not only protect the authenticity and quality of their services and as a whole company but also to the one who will be affected to the way they handle things in terms of the legal reasons, which in the best interest of their investors, shareholders, employees and most of all their customers. According to the Fern Fort University, PLDT should identify the legal factors that could impact their social status in the economy in terms of the:

● Anti-trust law in Telecom Services – Foreign industry and overall in the country.

● Discrimination law

● Copyright, patents / Intellectual property law

● Consumer protection and e-commerce

● Employment law

● Health and safety law

● Data Protection

4 Strategy Formulation

In order to provide the continuously of success and the progress development of the PLDT, they believe in creating the wider broad of services and distributing the positive effects in the industry of the company not only covers the communities but with the whole globalization that is in place in the country as it can also make a positively approach or an any outlook that set as a responsibility towards influencing to other countries as well. According to the press released of Chairman Manuel V. Pangilinan, “The PLDT Group is in a unique position in the industry – we have the scale and ability to continue investing significantly in infrastructure and services which can impact positively on our country’s development. We have been always mindful however that this strength begets much responsibility. We have therefore seen to it that our subscribers derive commensurate benefits in terms of value and innovation”. In order to formulate a strategy within the company, expectations is a valid statement that must’ be acknowledge within the company. It doesn’t mean that it can or cannot have an adverse effects in the company but just think the possible potential of the company in the long run where there will be on some point that they can improve their services not only to the people but also in the business as well. And its expectation is the representative of how valid and consistent their work as it is.

It was therefore concluded by Chairman Manuel V. Pangilinan that “Over the medium term, our goals are to continue achieving growth in our core businesses while establishing new revenue streams from recent investments, principally Spi. Our strong cash flows provide us with this “triple play” ability – new investments, sustained capital expenditures and increasing dividend yields. In this way, we address shareholder needs both for the present and for the longer term,” And it is a valid point to which the reputation is continuously uphold by their excellent services which actually reveals better result from the expectation of the masses and had actually generated revenue and more profit coming from the customers, investments and its shareholders.

“Our core earnings for the first quarter this year have been more encouraging than anticipated. We envisage revenues to continue growing whilst we manage down our cash costs, including interest expense. Cash flows will be healthy; debts will continue to reduce across the board – including prepayment of most of Piltel’s debts. In that light, our dividend payment policy is currently being considered with the view of raising our payout ratio to shareholders to 60%. This reflects our improved assessment of prospects for 2006 as a whole,” - Chairman Manuel V. Pangilinan

4.1. Boston Consulting Group Matrix

The major products of PLDT are Fixed Line telephony or communication, Mobile, broadband or wireless connection. The Market share that will show below is compared with the largest competitor of the company which is GLOBE.

Table 5

Figure 3. Boston Consulting Group (BCG) Matrix

The resulting figure indicates that the broadband and mobile are in the star quadrant with high market share and high market growth. It can be forecasted that with the maintenance of quality of product and service, it will remain and can keep its good position. Fixed line is in the cash cow quadrant which means it has high market share and lower market growth and could move into the dog’s territory if a decline of services will occur.

4.2. Strategic Position and Action Evaluation Matrix

Table 6

RATING SYSTEM

(CA) And **(SP) => **Rating Scale from -6 (worst) to -1 (best)

**(IS) **and **(FS) => **Rating Scale from 1 (worst) to 6 (best)

CONCLUSION

X – Axis (CA AVERAGE + IS AVERAGE) 3.8

Y – Axis (FS AVERAGE + SP AVERAGE) 0.5

Figure 4. Strategic Position and Action Evaluation (SPACE) Matrix

The results of the 4 strategic positions which are the Competitive, Industry, Stability and Financial Position was marked in the upper right side of the graph or in the Aggressive Quadrant which simply means that the strategies that should be given priority in the implementation process are as follows: Horizontal, Backward, and Forward Integration, Market Development, Product Development, Market Penetration, Technological Development and other Diversification.

4.3. Grand Strategy Matrix

Table 7

The overall market growth in terms of subscriber’s base in the year 2017 of PLDT remains the same until this present year. Market Growth is still at 7.3% and the market value is still at 8.1% making the company fall into a rapid market growth. As reported, the rapid market growth is based on the increase of subscriptions and the overwhelming volume of data usage anchored with the emerging new technologies.

Globe is the major competitor of PLDT, making the company be in a competitive position. It prioritizes the development of its network and customer service in order to dominate the postpaid segment.

The vector results emphasizes that PLDT is in the Strong Competitive Position and Rapid Market Growth which means they should craft strategies targeting the Horizontal, Backward, Forward Integration, Market Development, Product Development, Technological Development and Market Penetration.

4.4. Internal – External Matrix

Table 8

4.5. Strength – Weaknesses- Opportunities – Threats Analysis

SWOT analysis is an imperative strategic planning apparatus that can be used by Philippine Long Distance Telephone Inc. supervisors to do a situational examination of the whole company. It is a critical method to analyze the present Strengths (S), Weaknesses (W), Opportunities (O), & Threats (T) PLDT Inc. is confronting in its current commerce environment.

Table 9

The table above shows SWOT analysis/matrix of PLDT Inc. and it empowers the managers of the company to creates four types of strategies, the Strengths-Opportunities (SO), Weakness-Opportunities (WO), Strengths-Threats (ST), & Weakness-Threats (WT) strategies. PLDT Inc. is one of the driving firms in its industry. PLDT Inc. keeps up its prevailing position in the market by carefully analyzing and investigating the SWOT analysis. SWOT analysis immensely intuitively prepares and requires successful coordination among different divisions within the company such as – marketing, finance, management data systems, operations, and strategic planning.

Strengths of PLDT Inc. – Internal Strategic Factors

Diversified business operations.

Across the telecommunication domain PLDT Inc. has a well-built free cash flow that makes the company fast moving into expansion of new projects.

Advanced integrated network.

PLDT has a large social media presence, with millions of followers across the three most popular platforms: Facebook, Twitter, and Instagram. On these channels, it has a high degree of customer engagement and a quick response time.

One of the top positions in the Philippines.

PLDT Inc. is the leading telecommunications and digital services provider in the Philippines.

One of the top providers of wireless phones.

PLDT Inc is a well-known company that has been in the industry for many years. As a result, the name is well-known.

Has creative marketing strategies.

PLDT Inc reached more than millions of followers in Twitter, Facebook, and Instagram which these three social media is one of the famous platforms and this makes them for having a strong presence on social media.

Has a wide range of products.

PLDT Inc has a large number of locations in almost every state, backed by a robust distribution network that ensures that its goods are easily accessible to a large number of customers in a timely manner.

Industry Specialists.

PLDT Inc has invested heavily in workforce preparation, resulting in a large number of highly trained and motivated workers. PLDT Inc has a diverse workforce, with people from various regional, ethnic, cultural, and educational backgrounds contributing to the company's success by bringing in new ideas and methodologies.

National coverage.

In the year 1928 PLDT Inc was founded and up to this year was still working and they have created up to 151 branches nationwide.

Foreign investment.

PLDT Inc forms strategic relationships with its manufacturers, distributors, retailers, and other stakeholders. This enables it to use them in the future if necessary.

Strong sales team.

PLDT Inc. Aspire to be the service provider and be the strongest and advance connection for the family are at home.

Weaknesses of PLDT Inc. – Internal Strategic Factors

Slow internet connection.

The performance evaluation is not done in a systematic way. People are often unappreciated for their work. Employee morale suffers as a result, and promotion prospects are limited.

Half of the company’s total dept are coverage by US dollars.

The company's current assets are poor in comparison to its current liabilities, which could trigger liquidity issues in its operations. At PLDT Inc, there is a lack of proper cash flow planning, resulting in situations where there isn't enough cash flow as needed, resulting in needless unplanned borrowing.

Venture for new technologies.

Even though PLDT Inc spends more on research and development than the industry average, it spends much less than a few players who have gained a major competitive edge as a result of their creative products.

Intermittent assistants.

In comparison to rivals, PLDT Inc has a higher rate of employee turnover. As a result of the increased turnover, the company is investing more on training and growth.

Low signal strength.

Due to the area of their costumers, there is an interruption on the signal that the company did not consider when they are offering their services and product.

Intense competition.

In comparison to its rivals, it is not very good at predicting product demand, resulting in a higher rate of missed opportunities. One of the reasons why PLDT Inc.'s days inventory is so high in comparison to its rivals is that the company isn't very good at predicting demand, so it ends up having more inventory in-house and in the channel.

Corroded cable lines.

Multiple families are availing the item and did not consider the number of valuable costumers within the area.

Company’s liability and obligations.

In recent years, competition has increased, and skilled workers have left the organization, potentially resulting in a talent shortage in the coming years.

Increase number of competitors in the market.

Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Public perception.

The product's marketing left a lot to be desired. Even though the product is a sales success, its positioning and unique selling proposition are not clearly established, which could lead to competitor attacks in this market.

Opportunities of PLDT Inc. – External Strategic Factors

Online Market.

Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided PLDT Inc. an opportunity to enter a new emerging market. Expansion of network that serves large number of customers.

Expansion of network that serves large number of customers.

New consumer behavior patterns may open up new market opportunities for PLDT Inc. It gives the company a great chance to diversify into new product segments while also generating new revenue streams.

Decreasing the prices of computers and laptops.

Reduced freight costs as a result of lower shipping costs will lower the cost of PLDT Inc.'s goods, giving the company the option of either increasing profitability or passing on the savings to consumers to gain market share.

Taking risk for new technologies.

Opening up new markets as a result of a government agreement – PLDT Inc. has been given the ability to reach a new emerging market as a result of the introduction of a new technology standard and a government free trade agreement.

Collaboration with other establishments.

As the market develops, competitor advantages will dwindle, allowing PLDT Inc. to improve its competitiveness in comparison to its rivals. In similar other product fields, an organization's core competencies may be a success. For example, GE healthcare research aided in the development of better oil drilling machines.

Threats of PLDT Inc. – External Strategic Factors

Extreme competition that causes margin pressure.

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Fixed line market drop.

An increasing trend toward isolationism in the American economy can prompt a similar response from other governments, reducing foreign sales.

Changes in currency that impacted foreign revenues.

Since the company operates in a variety of countries, it is subject to currency fluctuations, which are exacerbated by the uncertain political situation in a number of markets around the world.

New competitors.

Intense competition with other companies for having the same telecommunication business.  

Unpredictable cost.

Local distributors' the strength poses a challenge in some markets, as the rivalry pays local distributors higher margins.

S-O Strategies

Maintain the strong presence of PLDT Inc on social media and continue to increase the number of followers in Famous social media to keep the customer engagement. (S2, S5, O1)

The company with its dedicated followers in social media is those customers who had a satisfaction on the services that the PLDT provided with them. It indicates high good brand quality that made the customers to share and recommend PLDT to other people.

A strong financial perspective with successive profits along with concentrated profit reserves that can be used to support future capital expenditures and expansion. (S1, S9, S7, O2, O5,)

The increased number of internet users all over the world is an opportunity for PLDT to maintain the financial cash flow for the company to expand more of their presence not just only in the Philippines but in other country in the world. It also resulted a growth in sale meaning, there are a lot of people purchasing the services that can be led to an online stores connection to make the sales expand.

Keep the quality of product and services over the years and are still valued by households, who find it as excellent value and worth it for the finances they pay. (S3, S4, O2, O4)

There has been an increase of household in purchasing the product and services of PLDT as their internet provider. The income along with an increase in consumer spending following the financial condition that leads to the growth of target market and having new customers that can be attracted to purchase the item.

A dedicated customer relationship with the PLDT Inc. has able to attain an elevated level of customer contentment among valued and new customers and good brand equity among the potential clients. (S6, S10, O1, O2)

Valued customer who also recommend and market the services and product help the company to maintain the number of customer satisfaction population they had. The Company provide good services and achieve the needs of the households that made the PLDT company to be the number 1 internet provider in the Philippines.

W-O Strategies

Innovation of strategies and plan to meet the challenge that the new entrants given to the company to not gain any lost. (W1, W2, O2, O5)

The company needs to plan and design an idea that make the company overcome the challenges that encountered on the new entrants. Even though the product and services are a success in terms of sales, but it is needed to innovate strategies that strengthen and cannot be attack by the competitors.

Strengthen the online sale services, websites, and social media presence for better engagement through brand ambassadors, campaigns, advertisement, testimonies, branding, and better customer service experience. (W8, O1)

Nowadays, People are using online platforms in all their transactions. Most of them are addictive in online shopping, bills payments, and delivery mode since it is the most convenient to them. Strengthen the online sale services and website is one of the keys to maintain the record of high sales. As much as possible make the online services and website easier to understand and manipulate. Provide good customer entertainment and ethics for the customer maintain its impression and good feedbacks. Social media is the most powerful online platform since everybody has its social media life. Using famous celebrities or popular local celebrities added the connection and trust of people on purchasing the product and services because of the appeal given by those people. Make a new tagline and had a unique TV and media advertisement so that it will be added to the strength of gaining new customers.

Develop financial planning and come up on a plan that make the financial stable to sustain the good services and employment of the employees. (W2, W3, O2, O3, O4)

Even though the company offers discounts and voucher it must maintain the financial stability of the company. Using discount and vouchers can help to encourage new clients on availing the products and services. It added the clients so that the financial will continue to be stable. The competition is always there with the new entrants, but it needs to have a concrete plan to beat the challenge on the market by upgrading the product and services and honest feedback coming from the customers. Broaden partnership and encourage investors to invest to the company it also helps to maintain financial stability.

S-T Strategies

Focus on the development of data and upgrade websites by putting some features for easy transactions for the customer will not find it difficult to manipulate when purchasing an item or internet plans online. (S6, S8, T5)

With the advance technology offered in this present time, the company must go with the trends online. The website must up to date and well-monitored for online transactions. As much as possible, developed the website by putting features that make the manipulation of online purchases and fill ups will be easy to the customers.

Strengthen social media connections by putting some entertaining advertisement and improve engagement through customer service supports brand ambassadors, campaigns, and testimonies. (S5, S10, T1, T2)

Make a campaign that fits to the bracket age of the valued customers. Putting unique advertisement that catches the attention of future customer is an advantage to maintain the market finance of the company. Brand ambassador must be well-known by the society since it is effective as those personalities uses appeal to authority to encourage viewers to avail the product and services. In social medias, we can put short testimonies as one of the strategies to prove the effectiveness of the product and services. For customer service, a well-trained employee and providing the customer to give feedback to the services for better improvement and to answer all the queries without any delay.

Offering Promos and discounts to the customer, provide low-cost product and services and raffle draws. (S7, S8, T1)

Chances of winning, discounts and affordable but in excellent quality of product and services are one of the keys to maintain the balance within the competitors. Giving discount vouchers online, Bundle promos, and low-cost options of plan can encourage the customer to avail the items and services. Filipinos are into luck, so offering them a raffle draw wherein the price is catchy for the viewers will also add the cash flow of the company. It will make the customers to be excited and will purchase the offered product and services to them since it will be affordable to them.

Expand the connection, partnership and make the branches more productive and visible by giving training to the employees to maintain the good services, record breaking ranking and impression of the valued customers and investors. (S9, T3, T4)

The company need a skilled worker to provide quality services to the customers. To maintain the Top leading telecommunications and digital services provider in the Philippines, giving workshops and training to the employee should be given so that it will avoid poor services and lessen the complaints on now providing the right solution on the customer support. Expanding connection and partnership is advisable since it bring small and big connection and elaborate new strategy to beaten up the growing competitor.

W-T Strategies

Continue to create partnerships and invite investors to sustain the needs and maintain financial stability to maintain the profit and afford salary maintenance for the employees. (W2, T3)

Partnerships and investors help the company to survive. To maintain stability, the company needs stable impression and strong partnership to their partners and investors. It is an opportunity to open good relationship and employees will stay on the company.

Maintain offering low-cost product and services and giving promo discounts and voucher to encourage more customers and maintain valued customers. (W10, T2).

One of the strategies of new entrants is giving their clients extravagant promos and discounts. It is effective though there will be a possibility of monetary loss. Balance the opportunity of giving promos and discount and have a fix policy and guidelines on how to purchase such opportunities so that it will be balance to the company sake and customer's sake.

Proper planning and strategies to meet the demand and conquer challenges that the new entrants offer (W1, W3, T2, T3).

Meeting the leaders of the company and plan innovation and strategies to cope up with the high technology and competitors to sustain the strength of the company demands and needs. The company need to improve plans and strategy and come up on a concrete solution to deal with the new entrants deals and offer to the market most especially to the consumers. A wide connection and broad development needed to not lessen and maintain the valued customer of the company. Strengthen the goal and products and services to maintain the high quality of services of the company.

4.6. Quantitative Strategies Planning Matrix

Table 10

SUM WEIGHTS 100% 100%

The PLDT Company is the Philippines' largest telecommunications provider, offering fixed line, cellular, and internet services. The telecommunications industry has undergone a transformation in recent years, and PLDT's position in the industry has been challenged by new entrants. These strategies were developed, implemented, and evaluated in order to come up with a better decision that would allow them to continue achieving their goals. The PLDT company has rates to compile some of the methods that were developed and evaluated based on an analysis of external and internal variables as well as a SWOT Analysis.

Based on the SWOT analysis, PLDT holds the top spot in the telecoms industry. They began by providing fixed lines to the Philippines market and have since expanded their market to include wireless technology. They became the number one cell phone provider after acquiring SMART as a wireless partner. When technology progressed, the DSL became widely established. Then came PLDT, which served as the company's technology arm. PLDT provided solutions to internet issues and even rose to the top of the rankings.

Based on the Internal and external factors, Customer experience- When PLDT introduced a product that enabled customers to connect to the internet faster using Broadband and WIFI, there were many complaints about the quality of the service. Many of the grievances stemmed from the sluggish link, which failed to meet the customer's expectations, as well as the fact that complaints were not addressed in a timely manner. Customers may decide to switch providers because they believe they are much better at providing the service required in this situation.

In our overall analysis, to avoid financial loss and losing to the fierce competition offered by new entrants, PLDT must improve their marketing strategy. One of the keys is to increase the online presence on various social networking platforms and to take advantage of opportunities provided by emerging local brands and newcomers. As much as possible, the company should generate a long-term strategy to maintain the market sales and to avoid losing finances and employees.

5 Strategy Recommendation

It is suggested that the organization ought to harp on making concentrated procedures. This includes product development, market development, and related diversification. These techniques require concentrated endeavors for PLDT’s cutthroat situation with existing items to improve.

Related Diversification

Giving all the users different options and more enhancement makes a strategy improvement, because people or the users can see that there are new activities and improved varieties that can help them have an internet connection more flexible and compact.

Product Development

Improve operation and service

Liable for item improvement guide and dispatch dates. Plan financial plans and earn back the original investment examination for new activities. Also, Distinguish and suggest new item ideas. PLDT is one of the well-known internet service providers in the country Philippines, enhancing their operation and service can help them to broaden their internet service and executing this could improve to accomplish the procedure. It tends to include a plan that can make and put together plans.

Market Development

Keep up exceptional contender information with center around its innovative abilities. Furthermore, screen contenders, make and update cross-references, perform continuous exploration of contender item highlights, blend and item advancement procedure. Should have careful information and comprehension of contender items to the segment level and innovation arrangement sources.

6 Action Plan

Related Diversification

Setting up standards and providing different kinds and flexible options to the user of PLDT internet connection can make a customer’s loyalty and giving them the standards that they will need in future circumstances and can last their stay in the internet provider since they experience value.

Product Development

This can build deals by improving and developing present assistance, upgrading and preparing legitimate client relationships. Indeed, even items and administrations are practically the comparative contrasts with different contenders. This is one of the components one bank can keep up the dedication of its clients and make a decent client connection.

Market Development

This activity includes expanding in working hours and days and advancement. This can keep up and serve more clients in whenever of the day and would be effective in the event that it will be following on additional time the executives during the initial time.

7 Conclusion

Based on the statistical results of the diverse matrices, the following conclusions have been made:

In Internal Factor Evaluation matrix (IFE matrix), the Philippine Long Distance Telephone Company (PLDT) garnered a total weighted score of 2.68% which means they are having above average responsiveness rating in telecommunication service provider industry. It also prompts that the firm has a solid position in terms of its internal issues, maintain its strengths, be mindful in balancing and improve its weaknesses.

With an overall score of 3% in External Factor Evaluation Matrix (EFE matrix), PLDT has a strong position in their field as telecommunication service provider industry. The company is responding above average by exploiting opportunities in overpowering threats in its external domain.

In accordance with the Competitive Profile Matrix (CPM), the Philippine Long Distance Telephone Company has the first position in the comparative analysis with the total weighted score 3.08% and followed by the Globe Telecom with the total weighted score 2.87% and Smart Communication with 3.01%. Among its competitors, Philippine Long Distance Telephone Company is on the lead in providing good service and the most advantaged in their field.

In the Boston Consulting Group Matrix (BCG matrix), the ensuing figure demonstrate that the broadband/wireless and mobile are in star quadrant which indicates that sector has high market share and high market growth. While the fixed line is in the cash cow quadrant with a high market share and lower market growth.

The Philippine Long Distance Telephone’s Strategic Position and Action Evaluation Matrix (SPACE matrix) shows Competitive Advantage (CA) with an average of -1.75, Financial Strength (FS) with an average of 3.5, Industry Strength (IS) with an average of 5.55 and Stability Position (SP) with an average of 3.0 which leads to a conclusion of 3.8 in the X-Axis and 0.5 in the Y-Axis. In overall, it was concluded that PLDT positioned in Quadrant 1 which Competitive, Financial, Industry, Stability Position pointed in Aggressive Strategy. This alludes that the Philippine Long Distance Telephone has a strong competitive position in the market growth. Therefore, the company must develop a market penetration and development strategy.

8 Financial Projection

9 References

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